Dive Brief:
- Mexican retail and bottling company FEMSA — owner of Latin American c-store giant Oxxo — is looking to expand its footprint in the U.S. upon divesting its stake in Dutch beer company Heineken, according to a recent company presentation.
- Monterrey, Mexico-based FEMSA, which operates more than 30,000 retail locations in 10 countries, including drugstores and Oxxo c-stores, is exploring the “proximity retail space in the U.S.” as part of its new strategy focused on retail, beverages and digital, according to the presentation.
- The retailer has wanted to expand in the U.S. for nearly a decade but hasn’t been able to due to an alleged conflict of interest related to Heineken’s shares, according to El Financiero.
Dive Insight:
Divesting its stake in Heineken will free FEMSA from regulatory restrictions it would face as the company aims to boost its retail business in the U.S., according to El Financiero. In addition to its expansion in the U.S., the company plans to grow its footprint in Chile, Colombia and Ecuador, hoping to reach about 800 to 1,000 Oxxo units per year moving forward.
“I mean, under the new strategy there will clearly be more capex in the short term than before for the business units,” FEMSA CFO Eugenio Garza told El Financiero in Spanish. “You will again see an increase in the percentage of sales over the course of the next two years, it will help as we are pursuing these other multi-format strategies.”
Although FEMSA did not provide many specifics into when or how its U.S. expansion may occur, the company is reportedly looking for “blank spaces” in the U.S. and is open to working with a third party because of the “fuel risk” associated with U.S. c-stores, according to a Reuters report.
FEMSA opened its first U.S.-based Oxxo store in 2015 in Eagle Pass, Texas. However, it appears that the store is no longer in business. The company’s lone Oxxo c-store in the U.S. today is a fuel-less site in Laredo, Texas.
